UNCTAD Seminar on Fostering China-Africa Cooperation for Equitable Development

Shanghai17 Jun 2010

[AS PREPARED FOR DELIVERY]

Let me start by expressing my sincere gratitude to the government and people of the People´s Republic of China for their extraordinary assistance and support in the organization of this meeting. Permit me also to express my thanks to Her Excellency Ms. Helen Mamle Kofi, Ambassador, Embassy of the Republic of Ghana in Beijing, for accepting to chair this meeting. Thanks are also due to our distinguished speakers for the interesting presentations they have prepared and to the participants for honouring our invitation.

This seminar is one of a series of activities initiated by UNCTAD that focuses international attention on South-South cooperation and stimulates debate on this crucial and growing feature of the world economy. Other key activities initiated by UNCTAD in this area include the organization of a multi-year expert group meeting on South-South cooperation in agriculture in the first quarter of 2010 and the setting up of a South-South cooperation unit in the Office of the Secretary-General.

The main objective of today´s seminar is to exchange ideas on China-Africa cooperation and identify policy actions necessary to ensure that such a partnership results in equitable development. The seminar also provides an opportunity for UNCTAD to discuss some of the findings of its 2010 Economic Development in Africa report entitled "South-South Cooperation: Africa and the New Forms of Development Partnership" which will be launched in Shanghai today at 14:30 hours.

As you are well aware, China is playing a major role in partnerships with Africa and the global South, and is the most significant developing country partner for Africa both in terms of scale of intervention and country coverage. It is therefore timely that this seminar is taking place here.

UNCTAD will make a detailed presentation on the theme of the seminar and so my remarks will focus on China´s growing engagement with Africa and will highlight a few issues I believe we should bear in mind as we deliberate on the subject.

The first point I would like to make is that China´s cooperation with Africa has had a positive impact on growth and development in the region and should be welcomed and strengthened. In recent years, China has become a very important source of development finance for Africa. Total merchandize trade between China and Africa rose from $8.1 billion in 2000 to $93 billion in 2008. Chinese foreign direct investment flows to the region also increased from $75 million in 2003 to $5.5 billion in 2008. Furthermore, Chinese aid and loans have contributed significantly to infrastructure development in Africa. It is estimated that Chinese infrastructure commitments in sub-Saharan Africa rose from $470 million in 2001 to $4.5 billion in 2007. Chinese investment and aid in the productive sector is most welcome given the secular decline of OECD DAC country aid to this sector in preference for social and health problems.

The second point that I would like to make is that China-Africa cooperation presents challenges for Africa. There are concerns that growing economic relations between China and Africa is reinforcing commodity dependence and replicating the region´s pattern of trade with its traditional partners in Europe and North America. There are also concerns about the potentially negative impact of these partnerships on governance, debt sustainability and the environment. There is a need for African countries and China to address these issues as an important step towards creating the basis for an equitable and long-lasting partnership which develops Africa´s economy rather than traps it in a situation of primary commodity dependence.

Following on from this, my final point therefore, is that China-Africa cooperation should be geared towards fostering economic transformation and strengthening support for regional integration in Africa. This will ensure that it increases domestic capacity to produce goods with high a value-added content rather than just raw materials exports. Additionally, regional integration can help build the competitiveness of domestic enterprises before being exposed to international markets. This will lay the foundation for high and sustained economic growth in Africa.

Let me end by posing three questions that I believe are important for identifying the necessary measures or policy actions to ensure that China-Africa cooperation results in equitable development.

How can China-Africa cooperation be managed to enhance productive capacities in Africa?

To what extent has China been able to strike a balance between its strategic interests in Africa and the region´s development needs?

What are the implications of the growing economic cooperation between China and Africa for regional integration in Africa?

I do hope that we will have answers to these questions by the end of the seminar and look forward to your contributions. I thank you for your attention.